Asia-Pacific firms need to accelerate hybrid advice transformation, as the region’s HNWIs show the world’s highest demand for hybrid wealth management advice
Asia-Pacific (excl. Japan) HNWIs show the world’s highest demand for hybrid advice in wealth management. Hybrid advice is preferred by 49.6% of high net worth individuals in the region, compared to Europe (49.1%), Japan (47.6%), Latin America (45.6%), and North America (35.1%).
However, hybrid advice preferences vary depending on a number of factors, including the stage of the client lifecycle as well as individual characteristics. Asia-Pacific (excl. Japan) HNWIs prefer a hybrid approach for four out of the five client lifecycle stages, with the ‘Profile’ stage being the exception. Chinese HNWIs have the highest inclination toward a hybrid approach at 52.1%, while Singapore has the highest preference in Asia-Pacific for an automated approach at 10.1%.
Wealth management executives in Asia-Pacific welcome hybrid advice and many have begun their transformation, though objectives differ from those of their peers in the rest of the world. Compared with firms in the rest of the world, Asia-Pacific wealth management firms place the greatest emphasis on achieving operational efficiency and regulatory compliance. Revenue objectives, while still important, are a more modest goal — potentially reflecting the reality of the still-nascent starting point faced by many firms.
Despite the compelling drivers toward hybrid services, hybrid transformation effectiveness in Asia-Pacific has been limited to-date. Asia-Pacific wealth management firms lag peers in both North America and Europe in terms of effectiveness, an issue compounded by lower satisfaction with hybrid advice from HNWIs within the increasingly under-served US$1 million–US$5 million segment.
Asia-Pacific wealth management firms will need to accelerate hybrid advisory transformation, in order to improve HNW client satisfaction, unlock financial benefits, and protect themselves from future disruption emanating from BigTechs. To do so, firms will need to adapt their people, processes, and propositions in order to drive the most value from hybrid advice efforts.
Interaction Preference for Wealth Management Capabilities(a), Q2 2017, Asia-Pacific (excl. Japan) vs. Rest of the World
a. Respondents with experience with the interaction in the past year have been analyzed
Note: Question asked: “How would you like to interact with your primary wealth manager or wealth management firm for each of the following services?”; HNWIs were asked to choose their preferred interaction between ‘Fully Wealth Manager-Led’, ‘Hybrid’ and ‘Fully Automated’ for 24 capabilities, and the values represent the average of the capabilities in the 5-stages shown above; Values in red and green boxes represent the percentage point difference by which Asia-Pacific (excl. Japan) HNWI preference is lower and higher respectively, compared to Rest of the World HNWI preference for that approach
Source: Capgemini Financial Services Analysis, 2017; Capgemini Global HNW Insights Survey 2017